SEC Staff Expands Draft Registration Statement Accommodations

On March 3, 2025, the staff of the U.S. Securities and Exchange Commission’s (the “SEC”) Division of Corporation Finance (the “SEC staff”) announced that, effective immediately, it is enhancing the accommodations available to companies to submit draft registration statements (“DRS”) for confidential nonpublic review by the staff, with a view to facilitating capital formation.

Background 

Historically, when a company wished to conduct an initial public offering (“IPO”) of securities under the Securities Act of 1933 (“Securities Act”), a company was required to file publicly with the SEC its initial registration statement filing and subsequent amendments. Upon filing a registration statement, the company’s intention to pursue a public offering and all information about the company disclosed in the filing would become public knowledge. If that same company ultimately did not undertake or complete a public offering, the public’s awareness of the company’s unsuccessful attempt to access the public markets could negatively affect the company’s reputation, valuation, and subsequent capital raising.

In 2012, Congress passed the Jumpstart Our Business Startups Act (the “JOBS Act”) to improve access to the public markets and ease regulatory compliance for smaller companies. The JOBS Act provided companies that qualified as emerging growth companies (“EGCs”) with the ability to make voluntary confidential submissions of their registration statements for SEC review and commnt. This allowed an EGC to begin the process of registering an IPO with the SEC without exposing itself to public scrutiny and market fluctuations after the initial filing of the registration statement and while the SEC was still reviewing and commenting on the filing. 

The DRS submission process was initially only available to EGCs and certain foreign private issuers (“FPIs”) in connection with their IPOs. Beginning in July 2017, the SEC staff expanded the availability of the DRS submission process to make it available to all domestic issuers and FPIs for IPOs under the Securities Act, initial registrations of a class of securities under Section 12(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and certain follow-on offerings if the DRS was submitted within 12 months of the effective date of a company’s initial Securities Act registration statement or Exchange Act Section 12(b) registration.

SEC Staff Provides Additional Accommodations for Issuers to Submit Draft Registration Statements 

The SEC staff’s recently announced enhanced accommodations are intended to facilitate capital formation by providing greater flexibility in planning and timing public offerings and Exchange Act registrations. Specifically, the enhanced accommodations: 

• Increase the types of registration statements eligible to be submitted as DRS submissions 
• Remove the 12 month limitation on use of DRS for follow-on offerings and subsequent registration statements
• Expand the availability of DRS for business combinations by special purpose acquisition companies (deSPAC transactions) with “SPAC-on-Top” structures
• Permit companies to omit the name of underwriter(s) from initial DRS submissions

The significant elements of the enhanced accommodations include the following:

• The DRS process is now available for the initial registration of a class of securities under Exchange Act Section 12(g). The SEC staff is expanding the availability of the nonpublic review process for the initial registration of a class of securities under the Exchange Act to also include Forms 10, 20-F, or 40-F filed to register a class of securities under Exchange Act Section 12(g). This expanded accommodation enables companies that are required or are voluntarily electing to register one or more classes of securities under the Exchange Act to benefit from nonpublic review even if they will not have those securities listed on a national securities exchange such as the New York Stock Exchange or the Nasdaq Stock Market. For those companies that are required to register a class of securities under Section 12(g), the guidance explains that such companies using the accommodation to submit their Exchange Act Section 12(g) registration statement on a nonpublic basis should allow for sufficient time to receive staff comments and still meet the public filing deadline to file the registration statement within 120 calendar days from the end of their fiscal year. A company is required to register a class of equity securities pursuant to Section 12(g) if the company meets certain statutory thresholds for total assets and number of holders of record of their securities. 
• The DRS process is now available for follow-on offerings and subsequent Exchange Act registration statements, regardless of the amount of time that has elapsed since the company first became subject to Exchange Act reporting requirements. The SEC staff will now accept a DRS for follow-on offerings under the Securities Act or subsequent registrations of a class of securities under either Section 12(b) or 12(g) of the Exchange Act, regardless of the length of time passed since the company became subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act. In addition, companies submitting a subsequent DRS will need to confirm in their cover letters submitted on EDGAR that they will file their registration statement and DRS submissions such that they are publicly available on EDGAR at least two business days prior to any requested effective time and date. With respect to Exchange Act registration statements on Forms 10, 20-F, and 40-F, companies will need to publicly file them so that the full 30- or 60-day period, as applicable, will elapse prior to their effectiveness. The SEC staff will continue to permit nonpublic staff review of only an initial DRS submission for follow-on offerings and subsequent Exchange Act registration statements. Accordingly, companies responding to any staff comments on an initial DRS submission for follow-on offerings and subsequent Exchange Act registration statements must respond with a public filing and not a revised DRS. 
• The DRS process is permitted for de-SPAC transactions where the SPAC is the surviving entity and the target company is independently eligible to submit a DRS submission. The SEC staff will now accept a DRS submission for de-SPAC transactions where the SPAC survives the business combination as the public company (i.e., so-called SPAC-on-Top structures), provided the co-registrant target company is otherwise independently eligible to submit a DRS submission under the staff’s policy. The SEC staff explained that it believes this approach is consistent with the Commission’s previous statement in its 2024 adopting release for the final rules on “Special Purpose Acquisition Companies, Shell Companies, and Projections” that a de-SPAC transaction is effectively the target company’s IPO. This accommodation will enable many SPACs and target companies to submit their registration statements on Form S-4/F-4 for their de-SPAC transactions as a nonpublic DRS submission. 
• The names of underwriters may be omitted from the initial DRS submission only. The new SEC staff guidance permits companies to omit the names of underwriters from their initial DRS submission only, when such information is required to be provided by Items 501 and 508 of Regulation S-K, as long as the names of the underwriters are included in any subsequent DRS submissions and in public filings. This accommodation could enable companies to submit a DRS at an earlier point in their offering timeline. 

The SEC staff also reiterated that many past practices will continue with respect to the nonpublic staff review of DRS submissions. Consistent with past practice, the SEC staff will continue to allow companies to submit initial DRS submissions and related revisions thereto on a nonpublic basis for IPOs under the Securities Act and initial registration of securities under the Exchange Act. A company submitting an initial registration statement under either the Securities Act or Exchange Act Section 12(b) is still required to provide a cover letter to its DRS confirming that it will publicly file its registration statement and DRS submissions at least 15 days prior to any road show or, in the absence of a road show, at least 15 days prior to the requested effective date of the registration statement. With respect to subsequent Securities Act offerings and Exchange Act registrations, a company must still file the DRS submission it had previously submitted at the same time as it publicly files its registration statement.

The SEC staff also restated that it will not delay processing a DRS submission if a company reasonably believes omitted financial information will not be required at the time the registration statement is publicly filed. Finally, the SEC staff will continue to permit FPIs to choose to proceed under the staff’s enhanced accommodations policy for DRS submissions, to follow the process available to EGCs if the company qualifies as an EGC, or to follow the guidance in the SEC staff’s May 30, 2012 policy statement on nonpublic submissions by FPIs.

 

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